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Julian I. Schocken 
Commander, United States Navy 


Doctor A. Rex Johnson 

Janiiary 19^6 


This treatise is an elementary exploration into an Amer- 
ican phencmenon — - a budgetary process that permits "legislation 
by appropriation". The primary method is essentially a narra- 
tive. The step by step story of the old American political game 
of taking a bill which cannot pass on its ami merits and easing it 
through as a "rider" on an appropriation bill. The narrative 
will stop at odd times to ponder over the intracasies of the con- 
gressional segment of the budgetary process, with the emphasis on 
the power of the sub-comittee chairman, the power (or lack of it) 
of the lobbyist, and the enigma of how a "rider" that nobody want- 
ed just happened to be enacted into law. The utter helpless- 
ness of a president caught with the fiscal year already tv/o weeks 
underway without an appropriation bill enacted, having to approve 
the "rider" if he wants the appropriations and not desiring to 
chance chaos by vetoing the appropriation bill, is a curious by- 
play to the budgetary process. 

All the material used in the preparation of this paper 
was the original source material as shown in the bibliography, 
no other author's work in either published or unpublished form 
can be blamed as a moulder of the opinions set forth here. Like- 
wise the opinions expressed do not represent the Department of 
Defense, the Department of the Navy, the George Washington Univer- 
sity, or the Navy Graduate Comptrollership Course. 


H •rf"^ |fli:4>_. ' .niOi^^JJ*., .^ 






H. R. 5115 
H. R. 6042 



The House Sub-committee on Department of 

Defense Appropriations hearings 

The Senate Sub-committee an Department of 

Defense Appropriations hearings 

The Dehates on the Floor of the House of 


The Debates on the Floor of the Senate 

The Conference Committee Report 

Final Passage 



The President's Message 
The Sponsor's Rebutal 





The fact that "things are not what they seem»» is a truism 
that never fit a case more perfectly than its application to sec- 
tion 638 of H. R. 6042, H. R. 6042, destined to heccme Ptiblic 
Law 157 - 84th Congress Chapter 358 - 1st Session, was a bill 
authorizing the appropriations for the entire Department of Defen- 
se for the fiscal year ending June 30th, 1956. This appropri- 
ation, making up one of the major portions of the entire Federal 
budget, had attached to it, as next to the last section, a para- 
graph which read as follonrsj 

Section 638 - No part of the funds appropriated in 
this Act may be used for the disposal or transfer by con- 
tract or otherwise of work traditionally performed by civil- 
ian personnel of the Department of Defense unless it has 
been justified before the appropriate ccxomittees of Congress 
that the disposal is economically sound and that the related 
services can be performed by a contractor without danger to 
national security. 

This section, from the introduction of the bill, through 
all the hearings, debates on the floor, and final passage, was to 
provoke more controversy, lobbying, and pressures pro and con, 
than any other single section, and its culmination was perhaps 
the most sharply worded message that President Dwight D. Eisen- 
hower ever sent to Congress. However, unless the origins and 
reasons for the insertion of Section 638 are clearly understood, 
the conclusions arrived at from a casual reading of the hearings 
pertaining to this section, the final draft of the section as 


r ■ 

/^av I 

enacted into law, and the president's acid comments upon it, might 
lead to an entirely erroneous concept of the forces at play both 
for and against it. The obvious conclusions are fallacious. 
The lobby pressures directed against this section vfere tremendous | 
the president's remarks intemperate; and, all in all, a seething 
cauldron of sandpapered feelings generated that was really a tem- 
pest in a tea pot. Most of this could have been avoided if the 
purport and motives of the originator were thoroughly understood. 

The origins of Section 638 lie in a bill introduced by 
Congressman Robert L, F. Sikes of Florida on Iferch 21st, 1955| 
H, R. 5115 84th Congress 1st Session, which said in its entirety? 

A BILL to prohibit the disposal, by contract or Executive 
order, of work traditionally performed by civilian ccsnponents 
of the Department of Defense. 

Be it enacted by the Senate and House of Representatives 
of the United States of America in Congress assembled. That 
the Department of Defense or any component thereof is hereby 
prohibited to dispose of, by contract or Executive order, 
work traditionally performed by civilian components of the 
Department of Defense unless it can be conclusively proven 
by an impartial board thPt the disposal is economically sound 
and that the related sei»vices can be performed by a contract- 
or without danger to national security. 

At first glance, the obvious purpose of the bill would be 
to protect the career civil service employee of the Defense Depart-f 
ment from the avowed intention of the Department to withdraw to 
the maximum extent possible, from owmership and operation of com- 
mercial and Indus trial- type facilities, consistent with the best 
Interests of national security. This policy doomed the con- 
tinued existance of such facilities and activities as coffee roast+ 
ing, ropemaking, plate manufacture, bakery operations, laundry 
operations, cleaning and dyeing operations and compai-aulv tj-pes 
of activities. The complete list comprises 41 types of facil- 

^U. S. Department of Defense Instructions 4100.16 of 8 Ma]» 
1954, 4100.17 of 28 Jun 1954, and 4100.18 of 13 Oct 195^ 


Ities which total over 1,000 specific activities. It is logical 
therefore to assume that the powerful civil service employee 
associations were exerting political pressure to perpetuate these 
activities, and incidently their positions, hy this means in the 
face of the Executive Department's stated policy from the Presi- 
dent and Secretary of Defense Wilson of not competing with private 
Industry wherever and whenever possible. 

Logical as this supposition is, it is fallacious. For a 
long time Congressman Sikes was concerned with another side of the 
issue entirely. The telephone company throughout the nation for 
many years has attempted to 'sell' the various services the idea 
of manning the switchboards at all military activities with tele- 
phone company employees. This plan has sone merit; en the one 
hand, the telephone company has a profitable service to sell on a 
contractual basis and on the other hand, the telephone coiipany 
i^ould offer complete repair and maintainence service on i/ui equip- 
ment and, most important, they would offer the services of trained 
and efficient operators at the military activities of the same com- 
petence as in use at city switchboards. All this looked mutually 
advantageous to both the telephone company and the go\''emment. But 
then the rude awakening came with the disasterous telephone strike 
against the Southern Bell Telephone Ccxnpany in 1954. Not only 
was service disrupted, but the strike grew more bitter day by day 
with 'unexplained* damage occurring and the national security 
effected. If the internal switchboards of the military install- 
ations had been manned by striking employees of the telephone 
company, the effects of the strike upon the national security would 


have Increased many fold. It was this situation, much of it 
taking place in Congressman Sikes' home territory, which raised 
serious doubts in his mind over the wisdom of withdrawing from 
the commercial- type activities entirely and having these services 
and manufactures accomplished by contract. 

When H, R. 6042 was submitted by Congressman George H. 
Mahon, the original bill contained a section 639 which read exact- 
ly, word for word, the same as Congressman Sikes* bill, H, R, 5ll5 
except that the words "it can be conclusively proven by an impart- 
ial board that the disposal is economically sound" no^f read "it 
has been justified before the appropriate committees of Congress 
that the disposal is economically sound". It is to be noted 
that Congressman Sikes of Florida and Congressman Mahan of Texas 
are both members of the Ccamnittee 021 Appropriations and that Bir, 
Sikes is Chairman of the Sub-committee on Department of the Army 
Appropriations and that Mr. Mahon is Chairman of the Sub-committee 
on Department of the Air Force Appropriations, 

The bill, as submitted, was referred to the Committee on 
Appropriations and the various sections further referred to the 
appropriate sub-committees. It is in the hearings of the sub- 
committees that the section under scrutiny received its most in- 
teresting treatment and it is the intent of this paper to follow 
the argument through the hearings, conferences, and debates to its 
Illogical conclusion, Hov/ever, for clarity, the section will 
always be referred to as Section 638, the section's number in 
Public Law 1^7, altho in the various revisions of the bill and 
through its various printings during amendment and conference, the 
section number varied between 639 and 638 almost alternately. 



The House Sub-ccxnmittee on Department of Defense Appro- 
priations commenced hearings on Monday, January 31 » 1955> "but It 
was not until three weeks later that any reference to Section 638 
entered the hearings* On Monday, February 21, 1955» Assistant 
Secretary of Defense (Supply and Logistics) Thomas P. Pike, as 
prelioinary data to his testimony, submitted a statement, page 
twelve of which, contained in general terms the provisions of the 
Department of Defense Instructions prt3viously cited. In Mr. 
Pike's statement, under the sub-head "COMMERCIAL AND INDUSTRIAL 
TYPE FACILITIES'* the foil asking two paragraphs appeared: 

On Novel iber 24, 1953 j the Secretary of Defense issued a 
policy statement that the Department of Defense would with- 
draw to the maximum extent possible from avnership and oper- 
ation of commercial and industrial type facilities, consist- 
ent with the best interests of national security. By means 
of a series of subsequent Department of Defense directives 
and instructions, a detailed program has been developed to 
insure that facilities will not be continued in imwarranted 
competition with private enterprises and that maximum util- 
ization will be made of justifiable facilities through 
cross servicing ♦ 

To date, three groups of existing commercial and indust- 
rial type facilities to bo reviewed under the program have 
been undertaken. These three groups include 41 types of 
facilities which total mei' 1,000 specific activities. Add- 
itional groups will be undertaken as early as possible, and 
future procedures of review will conform X7ith the newly- 
established Bureau of the Budget review program. 

Here we have the first Indication that Section 638 of the 

bill is diametrically opposed to a policy that the Executive De- 

partment has been pursuing for over a year. Hwever, it is 
also obvious that the members of this sub-conmittee have only 
a passing interest in Section 638« After a few perfunctory 
questions by the chairiaan and Congressman Edward T. I^ller of 
Maryland, the subject and its policy, at complete variance with 
the bill, was allowed to drop. Nov/here else in the House hear- 
ings do vre find any other mention of Section 638, or any witnesses 
who ask to testify either for or against its provision. The var- 
ious National Associations of merchants representing every field 
of trade were napping blissfully una^^'are of its existancej or 
perhaps, they were lulled into a false sense of security and ccxn- 
plaeency by the benevolent attitude of the Executive Department 
toward removing the Armed Services' competition with private in- 
dustry and the Department of Defense Instructions implementing 
that stated policy. In any event, nowhere in the Hoa*^ "^ hear- 

ings on the Defense, Army, Ilavy, or Air Force budgets does the 
opposition clamor to be heard and set forth their arguments to 
fight this threat to a policy they have worked so long and hard 
to bring about. A4p. Pike testified in January, but in late 

May before the Senate sub-committee the opposition is alerted, 
armed (with facts, figures, and philosophy), organized and ready 
to do battle. 

On Friday, Ivlay 27, 1955, Senator Dennis Chavez of New 
Mexico, Chairman of the Sub-comi^iittee for Department of Defense 
Appropriations of the Senate Committee on Appropriations called 
Mr. Ralph B. Dewey, Washington representative (Washington repre- 


sentatlve is oft-times syncaiymous ^7ith registered professional 
lobbyist) of the Pacific American Steamship Association. Mr. 
Dewey's testimony is quoted almost completely and verbatim for 
three reasons; first, as the first witness Iilr. Dewey sets the 
stage for the succeeding witnesses with the entire philosophy of 
the opposition; second, it is not desired to quote out of con- 
text and perhaps distort unmeaningly the words of the witness; 
and third, ISt» Dewey not only sets the stage with the philosophy 
of the opposition , he also sets forth the very convincing sub- 
stantive arguments wliich should weigh heavily with logical, de- 
liberative, and impartial legislators. V/ith the succeeding 
witnesses a briefer treatment will be given in the interest of 
brevity and 'not fogging the air* with irrelevancies , verbal 
prestidigitation, and redundancies; however, where a new argu- 
ment or idea is put forth, the attempt will be made to lift it out 
of context while faithfully preserving the original intent. The 
long succession of witnesses is purposely recorded in detail to 
show the weight of the opposition and how it went for naught. 
The opposition was organized and presented their case well; but 
their appeal made little impression (against not a single propon- 
ent's testimony) with the sponsors of the section. 

Mr. Dewey mounted the witness chair and testified as 

My name is Ralph B. Dewey, Washington representative 
of the Pacific American Steamship Association, headquart- 
ers in San Francisco, which association comprises the 
principal ship operators on the Pacific coast. 

I am sure that the members of this sub-committee and 


the full committee are keenly aware that the steamship 
industry at the present tiwe is one v/hich is very defin- 
itely in competition with the Defense Department's mer- 
chant marine, the so-called Mlltary Sea Transportation 
Service. I am not prepared in these proceedings to 
open the subject of the degree of that competitionj hem 
much of it is logical, proper, fair, or otherwise equit- 
able. I do, however, simply wish to oiient my testi- 
mony to this fact, that we are in competition on many 
trade routes directly, daily, with ships operated by 
the Federal Governaeni, carrying in many cases commod- 
ities Identical to the ones we are, not special commod- 
ities but general merchandise. And, as such, we feel 
constrained to testify in these proceedings on a matter 
such as section 638 which really deals v/ith one of the 
fimdamental matters of public policy in our present-day 
Government. With tliat preliminary statement, I would 
like to read a very brief statement. 

I should first state that other steamship groups 
from both coasts — - I represent, of course, the west 
coast — from the east coast ana all other steamship 
associations have communicated separately with this 
committee and the views that I represent here this morn- 
ing have been expressed by them. 

I will simply elaborate upon what is generally the 
view of the steamship industry today. 

Our opposition to section 638 stems from a fear that 
this section will: 

1, Supercede certain executive department agreements 
that affect the relationships between the Defense Depart- 
ment and the shipping industry. 

2, Violate the intent of Congress as expressed in 
various statutes. 

3. Put the damper on any action which might flew from 
recommendations of the Government Operations Committee 

of Congress or frora the Koover Comiriission reports, both 
of which groups have studied this precise problem for a 
considerable time. 

4. lumper progress already made by the Defense Depart- 
ment itself and the various committees within the De- 
partment that are studying areas where the Government 

can safely get out of business enterprises. 

The proponents, of course, disclaim any intent in 
section 638 to stop the institution of economies or 
essential changes in Government enterprises and emphasize 


that they simply want to provide Congress through its 
appropriate coiomittees v/ith the final veto on any change 
in the status of Defense Department activities. In 
practice, however^ it seems obvious that the clmasiness 
of a procedure which requires a myriad of details to 
come before busy congressional committees and the attend- 
ant risk of jurisdictional controversies couJ.d, in and 
of themselves, make the plan quite unworkable and could 
effectively stop many plans for instituting economies 
within the Defense Department. 

I use that word 'unworkable' I might call your at- 
tention to several phrases in section 638 that are very 
unclear, are rather new in statutory language, and might 
require endless interpretation. 

The retention of section 638, in our view, would be 
the violation of a fundamental principle of our legis- 
lative process, which provides that whenever the basic 
principle of policy of our economic system is to under- 
go a liiajor overliaul that such proposal should be the 
subject of exhaustive inquiry, and study by the commit- 
tees of Congress within whose jurisdiction such basic 
principle resides. This is much too great a problem 
and Involves a far too important public-policy question 
to be submerged in an appropriations measure. We re- 
spectfully urge that the Appropriations Committee delete 
section 638 and defer the matter to the substantive com- 
mittees in both Houses, specifically the Government Op- 
erations Committees, whose responsibilities for invest- 
igating and recommending legislation regarding Govern- 
ment operations are established by resolution of the 
Congress ,•*• 

It might be well at this point to interrupt Mr. Dewey's 

testimony to belabor this one point. Congressman Vinson of Geo- 

gia V'ill pick up this very same point again In the debate on the 

floor of the House so it is well to mark it here as one of the 

salient points of this entire thesis. The objection to this 

section 638 is on strong legal grounds that it is 'unethical' 

and contrary to the spirit of our legislative process if not down 

Hearings before the Sub-committQe of the Committee on 
Approoriations United States Senate, Dept of Defense Appro for '56 
pp 1243-7. U, a. Govt Printing Office 1955 


o;t i 

right imconstitutional to squeeze legislation through v/hich is of 
a controversial nature and might have truuble passing on its own 
merits, or even have absolutely no chance of passing on its own, 
especially if a Presidential veto is a certainty, "by tacking it 
as an additional section, amendment, or 'rider' to an appropri- 
ation bill. Of course, the most famous of these riders was the 
Piatt Amendment which was a rider to the Army AppropriationtJ Act 
of 1901. The amendment had absolutely nothing to do with Army 
appropriations but specified the conditions mider the United 
States might intervene in the internal affairs of Cuba. The 
procedia*e is rightly considered as undemocratic since by using 
It, a House that is of a different party than that of the Senate 
or Presidency, can usually amend the appropriation bill with leg- 
islation that could not stand by itself, and since the appropri- 
ation bill is rarely subjected to a veto because of the fiscal 
nesds of the Governmental operation, the overs ial piece of 
legislation rides through. That is exactly what will be claimed 
in this case by both the Chairman of the Armed Services Coriirdttee 
(who wanted to hold his own hearings on Mr. Bikes' original bill) 
and the President, in Ms scathing message apnro^ring the bill and 
disapproving (teciinically, illegally) section 638. 

Ivlr. Dev/ey continues his testimony by giving the phil- 
osophy of most of the opponents of the section. His remarks here 
are echoed by each of the succeeding witnesses 8 

V/e are somewhat concerned tiiat the impetus for the in- 
clusion of section 638 in the Defense Department Appropri- 
ations Act inight be based upon the trumped-up hysteria in 
certain quarters that the Hoover Coranission recommendations 
are the cause of every recent change in the Military Est- 


*-s * 

ablishment. especially if it involves reduction of person- 
nel» Actually, as this committee well knows, the issue 
of the rlesree to which the fiOvei*nriient shonlcl engage in 
business activities antedates the Hoover Commission by a 
number of years. Further, congressional interest in 
the matter has brought about many constructive changes 
during the course of those investigations, and the Hoover 
ComLtnission, in its recent reports, has emphasized once 
again the salient points In this controversy, which are: 

1, Government businesses pay no taxes. 

2, Government businesses deprive the Government of 
taxes that would otherwise be paid frcM private sources. 

3» Government cost figures are incomplete and most 
accounting records are inadequate since many overhead 
and expense items are omitted. 

4. Government enterprises are in many cases respon- 
sible for unfair coripetition. 

5» Governiiient entei'prises tend to perpetuate them- 

6, Government enterprises tend to spawn other Gov- 
ernment enterprises of a corollary or support nature. 

Members? of tills coLimittea will recall that in the 83rd 
Congress, both the House and the Senate Government Oper- 
ations Committees con3idered legislation dealing with the 
same issue which is •'•aised in section 638. The House 
passed K, H. 9^35 ^nd the Senate Committee passed an 
amended version, the substance of both bills being to 
provide the machinery for adjudicating which of the i^any 
Government enterprises are necessary to be retained. 
The fundamental difference bet\veen latit year's lesisla- 
tion and section 638, however, is that the executive de- 
partment rather than congressional committees would serve 
as the investigatory body (Doijartment of Commerce) and 
tlie President would exercise the final judgraent aa to 
whether a Government enterprise should cease or continue, 
dapendlng upon the national interest Involved. 

Iiet me insert that I certainly am not v/edded to the 
manner in which these things should be done in the execu- 
tive department. The point I am raising is simply that 
this rayt.'iad of details is better handled by executive 
department comrriilttees that are familiar v/lth the business 
that the Government is engaged in. 

It is our hope that the Appropriations Coiamittee will 
not tie the hands of the substantive jocujiittees of Con- 
gress to consider once again in t.Viis Congress this Im- 
portant question of public policy. 


Every well-r\m enterprise should have the flexibility 
institute econcMies on its on^n without being forced to go 
to the board of directors for every decision • Section 
638. hoi^ever, would require the Defense Department to con- 
sult a special board of directors sitting as a committee 
of Congress to get clearance as to whether or not the De- 
partment could institute an economy or divest itself of 
same commercial- type enterprise. The administrative 
problems and the political manipulations in such a pro- 
cedure would indeed be formidable. 

Finally, I would like to quote from an address by 
General Eisenhower, then Chief of Gtaff , made in Detroit 
on June 3» 194-6, in which he states t 

In general, the more use we are able to 
make of outside resources the more energy 
the Army will have to devote to strictly 
military problems for whose solution there 
are no outside facilities, or which, for 
special security reasons, can only be hand- 
led by the military, 

General Eisenhower's words might well bo a summation 
of the widely held view that the Defense Department should 
use outside fac:?.li(:,ies wherever possible and confine it- 
self to essential or noncompetitive business functions. 
There is a long way to go before this goal outlined by 
General Eisenhower will be achieved, but progress is be- 
ing made all the time. We earnestly urge that section 
638 not be placed as a roadblock toward achieving this 

Thus testified Mr, Dewey of the Pacific American Steam- 
ship Association, Mr. Dewey was briefly questioned by the sub- 
committee members but added substantially nothing to his original 
statement and then stepped down to relinquish the witness chair to 
a procession of twelve other •Washington representatives' present- 
ing the views of the National Wooden Box Association, the National 
Associated Businessmen, the Chamber of Commerce of the United 
States, the American Warehousemen's Association, the National 
Paint, Varnish, and Lacquer Association, the Transportation Assoe- 
iation of America, the Cordage Institute, the Movers Conference of 



America, the Association of Professional Photogrammetrists, the 
International Association of Ice Cream Manufacturers, the American 
Association of Nurserymen, and the American Retail Federation. 
This last federation is a federation of all the retail associ- 
ations and ccxnprises more than 700,000 retail outlets of all 
types and sizes throughout the country 5 the list of associations 
making up this federation is impressive if not staggering. And 
in addition to this array of merchants of every size, shape, and 
description testifying against the section, there was read into 
the record three letters from an equally powerful and impressive 
faction? one from former Senator Herbert R, 0' Conor of liferyland, 
representing the American Merchant Marine Institute, one from 
Mr. Henry G. Riter, 3rd, President of the National Association of 
Manufacturers, and last but not least, one from Secretary of Com- 
merce Sinclair Weeks, 

Before proceeding with the high lights and salient points 
of the testimony of these high powered men of national stature, 
the fact should be emphasized now for clarity and it will be 
reiterated again later that no person, association, or government 
official testified in favor of this section. Not a single line 
appears in the hearings in support of section 638 or in rebutal 
of the arguments put forth to strike it out of the bill. 

The next witness was Mr. C. D. Hudson, executive vice- 
president of the National Wooden Box Association. His testimony 
was a reiteration of Ifr, Dewey's statements, both the prepared 
statement for the record and his verbal statements as a witness. 
However, two points can be cited as pertinent} first, Mr. Hudson 

( 13 ) 

also objected to the wording of section 638, as follows: 

I win not go into detail with regard to this sec- 
tion, but in our opinion this section would slow dov/n, 
or perhaps nullify existing directives which have re- 
sulted in considerable progress toward getting the Gov- 
ernment out of the wooden-bcjK business as well as out 
of many other lines. 

The section itself is so vague as to lead inevit- 
ably to administrative difficulties, in oup opinion. 

The word » traditional • appears there. Tradition 
is defined by Webster as something handed dovm from 
the past, an inherited culture, attitude, et cetera. 
The term 'appropriate committee* is carried in that 
section. There again there is indefiniteness and 

and secondly, and much more important than the vagueness of the 

wording or the impact of the section on the wooden-bcK industry, 

is the disclosure during cross examination by the chairman of the 

sub-committee of the f ollotving bit of intelligence that is worth 

quoting verbatims 

Senator CH&VEZ; I will make this statement before you 
leave, Mr, Hudson; We have a tremendous amount of corres- 
pondence dealing with this particular section. It is 
about 40 to 1 on yoiir side, Mr, Hudson, 

That is the first indication of the tenor of the 'grass roots • 
sentiment on the issue. It is amazing to tabulate these simple 
facts} with the witnesses appearing before the sub-committees lOOf 
against the section, with the correspondence of the members run- 
ning 97i^ against the section, with the Congressional debate (as 
we shall see later on) preponderately against the section, with the 
executive department against the section, Section 638 survived the 
attacks from all quarters and remained in the bill until signed 
into law. However, let us continue to examine the progress in 
logical sequence and return to the Senate sub-comittee and the next 


The next witness was Mr, Elton Kile, president of the 
National Associated Businessmen, Inc., who submitted for the re- 
cord a prepared statement which was an excellent dissertation and 
a well-documented, lucid, interpretation of the case. Some of 
Mr. Kile^s statements are worth lifting out of his text and quot- 
ing here since they provide a wealth of background and historical 
information, the understanding of which makes the end result in 
this case the so much more illogical and obscure, 

I4r. Kile J ....Let me say at the beginning that 
the Federal Government has been in various kinds of 
commercial, industrial, and financial business for a 
great number of years. The ropewalk at the Boston 
Navy Yard was set up by President Andrew Jackson more 
than 120 years ago, so the Navy would not be depend- 
ent upon Russian hemp. The Navy's paintmaking fact- 
ories began as an experiment more than half century 
ago. The roasting of coffee, the manufacture of spec- 
tacles, false teeth, and wooaen legs, the baling of 
scrap metal, and the scores of other activities were 
begun, you may be sure, with no thought tbat they would 
go on for ever. As the Hoover Commission stated re- 
cently? "Government creates business-type enterprises 
in economic emergencies, in the emergencies of war, 
and for the development of projects which are not adapt- 
ed to private enterprise." But, as this report goes 
on, by the time their tasks have been completed they 
"resist termination", 

Mr. Kile's statement goes on from there to trace the Con- 
gressional efforts to reverse this trend, beginning with the Shan- 
non Committee of twenty-five years ago, the Bonner Committee which 
filled four volumes with exhaustive and comprehensive testimony in 
1952, and the Harden committee going over the same ground in 19^3 
and 1954. The historical section is brought up to date by cit- 
ing the bills before the last two sessions of Congress, namely 
H. R. 9B35 which passed unanimously at the previous Consent Calen- 
der of the House but died in the Senate because of adjournment, 


and S. 1003 of the 84th Congress, which states in no uncertain 
terms as a declaration of policy: 

" It is the declared policy of the Congress 

that the Government shall get out and stay out of busi- 
ness-type competlti on. . . • • " 

Another interesting point which Mr. Kile drove home in a 

blunt, straight-from-the-shoulder attack was the following j 

It must be perfectly evident to anyone that section 
638 could have no effect in the world other than to per- 
petuate every business activity in the Defense Depart- 
ment. You know and I Imow and every one of the 435 Mem- 
bers of the House laiows that economy in Government is 
always highly desirable in the opinion of every Congress- 
man until it hits a project in his own district: and in 
the same way we all know that the termination or Govern- 
ment's competitive business activities is a fine and 
praiseworthy idea imtil it run.? afoul of some business 
or other, whatever its natui»e, in some member's hcane 
district. Immediately then, termination is fro^med on 
and resisted, Mr. Chairman, most of the Government 
business enterprises are located in the districts of Mem- 
bers of Congress, and if section 638 is retained in the 
Defense Department appropriations bill, it is unlikely 
that any of them "will ever be terminated because they 
will run into the congressional act of mutual courtesy 
that is commonly kno\m as logrolling. 

That is only a small sample of Mr. Kile's statement. He 
presented his case bluntly but well. The truths he was demon- 
strating could not do anything else but make a profound impression 
except that Mi*. Kile and all the witnesses past and yet to ccane 
were not faced by an opposition which dealt in logical arguments 
on the merits of the case. They were opposed by the legisla- 
tors' self-interest which was a difficult opponent no matter hew 
the situation is viewed. 

Rather than continue to belabor the point with repetition 
or sheer weight of nxambers, the testimony of the other witnesses 
will be placed in a recommended reading category. Their testl- 


mony merely adds weight and substance to those that have gone be- 
before without the addition of any new argumentative points. Hew- 
ever, the complete story is impressive and to get the feel and the 
sense of the entire argument the source material is well worth 
reading and is highly recommended. 

Perhaps the story has gotten a little ahead of itself, 
iet us focus attention upon the debates on the floor of the House f 
on Thursday, May 12, 1955 » Mr. Mahon moved that the House resolve 
itself into the Committee of the Whole House on the S>tate of the 
Union for the further consideration of the Department of Defense 
Appropriation Bill, H. R. 6042, Late in the course of the de- 

bate for that day, 24r, Vinson of Georgia, offered an amendment to 
strike out Section 638 of the bill on the grounds that it was leg- 
islation and did not belong in the appropriation bill and, further^ 
that H. R, 5115 f Mr. S ikes' bill dealing with the exact same sub- 
ject was already before the Committee on Armed Forces. Mr. Taber 
and IvUp. Canncffi both immediately jumped to thoir feet to compliment 
Mr, Vinson on submitting the amendment; to v/hich Mir. Vinson gal- 
lantly replied that when he found the gentleman from New York and 
the gentleman from 'Mlssovirl agreeing with him, he knew he was on 
sound ground, Hcr^^ever, once the prelimir^ry pleasantries were 
gotten out of the way Ltp. Vinson, the chairman of the Armed Ser- 
vices Committee, and as such, is not only one of the senior mem- 
bers of the House, but also an authority of some note on the sub- 
ject matter, got dovm to a serious, well- thought out attack on 
section 638. The main part of Mr. Vinson's speech on the floor 

is well v;orth quoting verbatim since it gives still another side 

of the multifaceted argument. 


^Congressional Record— HOUSE, May 12, 1955 P. 5306 


Mp. Vinson: •••.•.. Let the House understand this. 
If you want the Government in business, you put section 
638 in the bill, I do not want Government in business. 
I want private enterprise in this country to operate; I 
want small business in this country. There are certain 
things it is necessary for the Department of Defense to 
do, and it is all right to do that, but there are hundreds 
of things that the Department of Defense is engaged in 
that private enterprise can do. Private enterprise has 
to support this country. You have to get taxes out of 
business to maintain the Department of Defense, 

I am not going to take any longer, and everybody un- 
derstands it. I hope you will vote for this amendment. 

Section 638 prohibits the Department of Defense from 
using any funds appropriated under this act for the dis- 
posal or transfer, by contract or otherwise, of work 
traditionally performed by civilian personnel of the De- 
partment of Defense unless it has been justified before 
the appropriate committees of Congress as economically 
sound and being without injury to the national security. 

Were it in order for me to do so I would make a 
point of order objection to this section because it is 
clearly subject to one. But again I am precluded be- 
cause of the nature of the rule under which we are now 
?roceeding. Therefore, I shall base my objection on 
he merits of the case. 

First. I would like to say that the inclusion of 
this section somewhat surprises me. I can find no test- 
imony in the hearings of the Appropriations Committee to 
help us understand it and to justify its inclusion. 

While I do not know who the sponsor might be, I 
would like to point out that the gentleman from Florida 
(Mr. SIKES) introduced H. R, 511^ on L5arch 21 and it 
was referred to the House Committee on Armed Forces. I 
referred it to the Department of Defense on March 23, 
requesting a report and I would like to point out that 
the bill now pending before the House Armed Services 
Committee is almost Identical to the provisions of sec- 
tion 638, 

If the author of the bill or any other Member would 
like for the Armed Services Committee to hold a hearing 
on the bill, the committee will be glad to do so. 

Now what would this section accomplish if enacted ? 
As I understand it, it would prevent the Department of 
Defense from transferring to private enterprise any work 
which was traditionally performed by civilian employees 
of the Department of Defense unless such transfer were 
first justified before the appropriate committee of Con- 


We find ourselves in a strange situation. It is 
the current policy of the Department of Defense, dated 
April 27, 1955, to use privately operated industrial 
and comiaercial-type facilities to the greatest extent 

Under that policy it is proposed that everything 
which can be done by private enterprise, without endan- 
gering the national defense, will "be done. As I read 
the section it would require that the Congress would 
first have to give their permission to the Department 
of Defense before they could implement this policy. 

I would like to point out that the criticism of the 
services staying in this kind of business was not raised 
by the House Armed Services Committee. It was raised by 
another committee of the House which conducted extensive 
hearings and made many far-reaching recommendations on 
this precise subject, which reccmiiendations have been 
faithfully carried out by the Department of Defense. 

So, in spite of the mandate of one standing legisla- 
tive committee of the House that the Department of De- 
fense t^arn over to private industry their commercial and 
industrial type operations, to the greatest possible ex- 
tent, we now find a section in this bill which would pre- 
vent the Defense Department frcan doing this without first 
getting the permission of some ccaimiittee of Congress. 

Most of this type of activity involves small business. 
Every day we try to help small business but in this pro- 
cedure you simply place another stumbling block in their 

The language in section 638 is so unclear that it 
would be almost impossible to interpret it. For instance, 
what is 'traditional* work ? Is it work performed for 5 
years, ^0 years, or 100 years ? Or what other yardstick 
do you use to establish the meaning of 'traditional* work ? 
FrajiVly, I do not laiow and I don't see how anyone else 
coVvl.f1 know under tlie language in this section. 

The issue is clear cut. One committee of the Con- 
gress has insisted that the Defense Department get out 
of these commercial- type activities and turn them over 
to small business and the other elements of private in- 

The Defense Department has agreed and adopted such 
a policy. In addition, there is a bill pending before 
the House Armed Services Committee on this very subject. 

For these reasons I urge the Members to support my 
amendment in order thiat we may conduct our business in 
the Congress in an orderly and intelligent manner. 


At the conclusion of Mr. Vinscxn's remarks there ensued 

the usual parliamentary Ijasselling with substitute amendments ccan- 

pletely negating the elimination of section 638 heing offered, and 

various members offering such remarks as they could get in prior 

to a vote* Of these, altho most were merely sound and fury 

(signifying nothing), the remarks of 2/tP, Brooks of Louisiana are 

worth noting since they interject still another facet, 

Mr, Brooks: Is this not just another attempt 
on the part of the Congress to really run the exec- 
utive branch of the Government ? Is this not just 
another effort to prevent the Department of Defense 
from handling its own executive business, as was in- 
tended to be prevented by the Constitution of the 
United States to be the case* 

To which i5r, Vinson replied: The gentleman 
from Louisiana is absolutely correct , 

An interesting thing now occurred; on a teller vote, Mr, 
Vinson's motion that section 638 be struck from the bill carried 
by 160 to 134 ™ but an hour later, when a rollcall was ordered, 
the section was reinstated by 202 to I84, Immediately following 
this, the bill was passed on a rollcall vote by 382 to 0, with 
52 not voting, 

Ifr, Vinson, a senior member of the House with many years 
of political campaigning and parliamentary n^neuvering behind him, 
«aw this section of the bill for what it was: an attempt to pass 
legislation by an appropriation bill rider. In addition to that 
major fault, the section was contrary to the stated policies of 
both houses of Congress as well as the Executive branch, and fur- 
ther, he saw it as an unwarranted (and possibly unconstitutional) 
infringement by Congress on the powers of the Executive branch. 
The wonderment of it all is that the section is able to move right 


along on its road to becoming law without too much interference. 
Under the budgetary process, as practiced in the United States 
Congress, the inference as to the power of a appropriation sub- 
committee chairman is plain. 

Before leaving the House's treatment of Section 638, it 
might pay, in the interest of greater understanding, to look back 
at the Committee on Appropriations report on H. R. 60A2^ and see 
exactly what Mr. Vinson was referring to when he said that the 
Appropriations Committee held no hearings on this section, yet 
they did render an opinion and recommendation to the House 'to 
help them understand it • . 

The report submitted by the Committee on Appropriations 

on May 5, 1955 to the House contained the follcwring paragraphs 

Section 638s Attention of the Committee has on 
a number of occasions been directed toward plans 
within the Department of Defense for the disposal 
or transfer by contract or otherwise to contract 
operations of the work traditionally performed by 
civilian personnel of the Department of Defense. 
The Committee recognizes that there may be circum- 
stances which make a contract operation more de- 
sirable than continuations of work by civilian per- 
sonnel within the Department. In some instances, 
this, however, represents a radical departure from 
established custom and it is conceivable that con- 
tract operations could, if carried to extremes re- 
sult in a loss of trained personnel and know-how 
within the departments with the dispersal of tools 
and facilities and result in an actually greater 
cost to the Government over a period of years. 
Particularly would this be true in the event of a 
sudden emergency which would require rapid expan- 
sion of ' on-base' activities. The Committee has 
no desire to hamper legitimate transferal of gov- 
ernment activities to private business where it 
can properly be shown that this is economically 
sound and that the related services can be per- 
formed by contract without danger to national sec- 
urity. In vi€fw, however, of the Government's 
great investment in its own shops and facilities 


84th Cong. 1st Session - House of Representatives 
Report No, 493 To accompany H. R. 6042 



and the knowr-hdvr of its civilian personnel and "because 
of this Committee's responsibility in the matter of 
appropriations it is felt that a justification of trans- 
fers before the appropriate committees of Congress is 
proper before the transfers take place. 

This was indeed a broad, sweeping, and positive recommend 
ation by the G(»maittee considering that the viewpoint expressed 
was that of the sponsor of the section without benefit of testi- 
mony either for or against the proposal. This was a section im- 
portant enough to be submitted as an entire bill of its own and, 
in this form, was being slipped through on greased skids without 
a hearing of any kind either for or against. Is it any wonder 
that the Senate hearings on the bill received the action (perhaps 
•reaction' is a more exact word) they did. 

Although not presented in this treatise in exactly that 
precise order, it is of the utmost importance for proper ccMpre- 
hension to keep the chronology and sequence clearly in mind. Sec- 
tion 638 was indeed a 'sleeper* in that for five months it lay 
well buried in the House Appropriations Committee and Sub-conmit- 
tees receiving no action, no publicity, and no testimony. It is 
only in May, after the debates on the floor of the House gave the 
section an airing and exposed it to the light of day, that the 
opposition to it began to clamor to be heard. 

We have already indicated the weight and volume of the 
testimony at the Senate Appropriation Sub-committee hearings, and 
have examined minutely some of the more typical arguments given. 
Lot :*; ntw examine the report of the Senate Sub-committee as they 
•reported the bill out' to the Senate. Remember that the Sub- 
committee members have most certainly read I/a?. Vinson's speech 
on the floor of the House in t'ae Congressional Record, and that 


the testimony of every v/itness appearing before the Sub-committee 
has been 100^ against the bill, and that the chairman of the Sub- 
committee admitted tliat he was receiving considerable quantities 
of correspondence running 40 to 1 against the bill, it raises an 
eyebrow, perhaps, and provokes just a little speculation when the 
Senate Sub-coumittee report contained the followring: 

The bill as it came from the House included section 
638 as follows: 

Sec. 638. No part of the funds appropriated in this 
Act may be used for the disposal or transfer by contract 
or othenvise of work traditionally perf orned by civilian 
personnel of the Department of Defense unless it has been 
Justified before the appropriate coramittess of Congress 
that the disposal is econoiiiically sound and that the re- 
lated services can be performed by a contractor without 
danger to national security. 

The committee recommends the deletion of this section 
and the insertion of the following section: 

Sec. 638. No part of the funds appropriated in this 
Act may be used for the disposal or transfer by contract 
or otherwise of work that has been for a period of twenty- 
five years or more performed by civilian personnel of the 
Department of Defense unless certified by the Secretary 
of Defense and reported by him to the Appropriations Com- 
mittees of the Senate and House of Representatives at 
least sixty days in adva.nce that the disposal is econom- 
ically sound and that the related services can be perform- 
ed by a contractor without danger to national security. 

The derivation of this Senate version Section 638 is hard^ 

ly capable of comprehension from the hearings but it comes to 

light in wryly humorous fashion when one turns to the debates on 


the Senate floor. 

On Monday, June 20, 1955f H. R. 6042 was being debated 
before the Senate and late in the proceedings Senator kundt of 

•^84th Cong 1st Session SENATE Report No. 54^ June 14, • ^5 
Committee on Appropriations Report on H, R. 6042 

Congressional Record Vol. 101 No. 103 Mon. June 20,«55 
Senate pp 7417 - 7424 



South Dakota introduced an amendment the purpose of which was to 
strike from the Senate version of the "bill all of section 638. 
Senator Mundt went on to say that he was the author of the change 
in language of the section to its present form from that version 
that had passed the House but he was ncm convinced that tha 'soc- 
ialistic enterprises* should be eliminated and the section should 
be stricken out in its entirety. 

Senator Mundt was chided both by Senatoi^ Chavez and Sen- 
ator Robertson for being so "persuasive upon a majority of the 
members of the committee, including all the Democratic members, 
that he convinced the committee that the language he proposed to 
add to the bill would take the government out of socialistic en- 
terprises generally" and now he wanted to kill the section entire- 

Senator Thye of Minnesota v/anted to change the "2^ years*" 
in the section to "40 years" because "if we went back 40 years, 
we would include the era when most of these governmental activ- 
ities came into being". This amendment was quickly beaten. 

I^. Mundt 's strategy was disclosed as "we can do all this 
in conference much better by adopting my amendment striking out 
the entire paragraph and putting the entire situation in confer- 

The debate then broke into full swing with the same argu- 
ments we have gone over before being put forth by many different 
Senators. The end result was that the Mundt amendment was de- 
feated 48 to 33 which meant that the section as reworded by Sen- 
ator Mundt, and which he was now trying to disavow, stayed in. 
The Senate version of H. R. 6042 was then passed 80 to and a 
conference was asked for with the House to resolve differences, 


On June 29, 1955 » Mr, Mahon, from the committee of confer 
ence, submitted a Conference Report in which Section 638 was one 
of the four amendments on which the committee was forced to re- 
port in disagreement. Out of thirty-five points of difference 
between the House version of the Department of Defense Appropri- 
ation Bill, 1956 and the Senate version of the bill, agreement 
could be found on thirty- one points involving billions of dollars, 
but Section 638 was controversial enough to have to be reported in 
disagreement, in that no points of common ground could be reached 
in the conference committee. 

Time was of the essence j this bill was supposed to go 

into effect on July 1, 1955. Time probably more than anything 

else forced an agreement over the secticfla which evolved into a 

hodge-podge of both versions when it was finally passed by both 

houses and sent to the President for approval. The wording as 

written into Public Law 157 was: 

SEC. 638, No part of the funds appropriated in 
this Act may be used for the disposal or transfer by 
contract or other^/ise of work that has been for a per- 
iod of three years or more performed by civilian per- 
sonnel of the Department of Defense unless justified 
to the Appropriations Committees of the Senate and the 
House of Representatives, at least ninety days in ad- 
vance of such disposal or transfer, that its discontin- 
uance is economically sound and the v/ork is capable of 
performance by a contractor without danger to the nat- 
ional security: PROVIDED, That no such disposal or trans- 
fer shall be made if disapproved by either committee 
within the ninety-daypperiod by written notice to the 
Secretary of Defense. 

Thus after a complicated gestation period Congress had 
finally given birth to its brain-child; but the really pains were 
to come with the afterbirth, as we shall see in the next chapter^ 

^84th Cong 1st Session HOUSE OF REPRESENTATIVES Report 
No. 1030 CONFERENCE REPORT to accompany H. R. 6042 

Public Law 157 - 84th Congress Chapter 358 - 1st Session 




On July 13, 1955, H. R. 6042 became Public Law 157 by the 
affixing of the President's signature indicating approval. One 
could hardly call it an approval though because, as noted pre- 
viously, the approval was accompanied by a stinging laessage brist- 
ling defiance and threatening non-compliance with Section 638. The 
President's exact words will stand alone 5 no mere summary, or com^ 
mentary will do them justice* 


I have today approved H. R. 6042, making appropri- 
ations for the Department of Defense for the fiscal year 
ending June 30, 1956, and for other purposes, I have 
done so because the funds which the bill makes available 
are urgently needed by the Department of Defense, Ex- 
cept for this imperative need, I would have withheld Liy- 
approval of the bi3JL| for I am advised by the Attorney 
General that one of its provisions, section 638, consti- 
tutes an unconstitutional invasion of the province of 
the Executive, 

Section 638 deals with the authority of the Depart- 
ment of Defense to rid Itself of many of the manifold 
activities that it has been performing with its civilian 
personnel, and that can be adequately and economically 
performed by private industry without danger to the nat- 
ional security. That section states that funds appropri- 
ated in the bill cannot be used to enable the Secretary 
of Defense to exercise this authority if. in the case of 
any activity of the Department proposed to be terminated, 
the Appropriations Committee of the Senate or the Appro- 
priations Committee of the House of Representatives dis- 
approves such proposed termination. 

The Constitution of the United States divides the 
functions of the Government into three departments — - 
the legislative, the executive, and the judicial - — and 


establishes the principle that they shall be kept separ- 
ate. Neither may exercise functions belonging to the 
others. Section 638 violates this constitutional prin- 
ciple . 

I believe it to be my duty to oppose such a violation. 
The Congress has the power and the right to grant or to 
deny an appropriation. But once an appropriation is roade 
the appropriation must, under the Constitution, be admin- 
istered by the executive branch of the Goveimment alone, 
and the Congress has no right to confer upon its commit- 
tees the power to veto Executive action or to prevent Ex- 
ecutive action from becoming effective. 

Since the organization of our Government, the Presi- 
dent has felt bound to insist that Executive functions 
be maintained unimpaired by legislative encroachment, 
just as the legislative branch has felt bound to resist 
Interference with its power by the Executive. To acquiesce 
in a provision that seeks to encroach upon the proper auth- 
ority of the Executive establishes a dangerous precedent. 
I do not, by my approval of H. R. 6042, acquiesce in the 
provisions of section 638. and to the extent that this 
section seeks to give to the Appropriations Committees of 
the Senate and House of Representatives authority to veto 
or prevent Executive action, such section will be regarded 
as invalid by the executive branch of the Governnent in 
the administration of H, R. 6042, unless otherwise, deter- 
mined by a court of competent jurisdiction 

That throws down the gauntlet in no uncertain terms. The 
message does not even soimd like Dwlght D. ElsenhcMer, either in 
tone or in substance. Actually, what he is proposing is exchang- 
ing one unconstitutional act for another; he proposes that for 
expedience sake he vfill sign the bill into law, but he gives fair 
warning that he regards the law as unconstitutional and will dis- 
regard such section as he deems fit. This precedent is even 
more dangerous than the one he is claiming the bill is setting. 
There is no need for legislation allowing a »line item veto* if 
this philosophy is followed to its logical conclusion. 

^84th Cong 1st Session HOUSE OF REPRESENTATIVES 
Document No. 218 Message from THE PRESIDENT OF THE 
UNITED STATES approving H. R. 6042 


The first reaction following the clerk^s reading of the 

President's message was a rather sijrprising one. Congressman 

Springer had inserted in the Congressional Record iimaediately 

following President Eisenhower's message the following extension 

of his remarks on the bill: 

Mr. SPRINGER. Mr. Speaker, I am glad that in hi8 
message the President has discussed section 638 of H. R, 
6042. making appropriations for the Department of Defense 
for the coming year. 

When this matter was before the House several days 
ago, many of us took the position that section 638 was 
a bad section and should not have been in the bill. In 
the first place it made it impossible for the executive 
department to get rid of certain business activities 
that it has been performing with civilian personnel in 
the Armed Forces establishment. I realize there are 
certain members of the House who have these activities 
in their district and they do not want to see them closed, 
even though the Defense Department can get along without 
them or they could be better done by private industry 

..There were many of us who felt that section 

638 would effectively tie the hands of the executive de- 
partment to continue to economically perform the activ- 
ities of the defense establishment. That section makes 
it necessary for the Secretary of Defense to come back 
and get the approval of the Appropriations Committee of 
the House or the Senate. I am sure that every Member of 
the House understands that there will be a considerable 
reluctance of members of that ccjmmittee to allcwr termin- 
ation of these activities in bases in their districts. 
In addition, this section makes it possible for other 
Members of Congress to run to the Appropriation Commit- 
tee for help any time that the Defense Department asks 
to terminate these civilian activities in their districts. 
All in all, it creates a very difficult situation for the 
Department of Defense to effectively perform its function. 
I think I can safely say that all the good work which the 
executive department has been doing along this line would 
be curtailed. 

I am not in anyway attempting to go into the legal 
question involved which the President had discussed at 
some length upon the advice of the Attorney General. 
That is a very tecbjiical legal point and I would certainly 
wish to examine the statutes and decisions <ut greater 
length before trying to pass an opinion on that matter. 

, only purpose at this time is to poiijii out the fact 
that section 638 was bad legislation when It was passed 


and It is "bad legislation today and never should have "been 
put in the bill in the first place. It has a peer morale 
effect upon those administering the defense establishment 
and in my opinion section 638 should he repealed. 

There we have the practical congressman's view of the log- 
rolling and "behind scenes manipulations that this section is bound 
to generate despite all of the sponsor's high sounding fears for 
the national security and doubts about the motives, judgment, and 
altruism of the Executive Department, How can the final decisioi|i 
be shifted to the shoulders of congressmen who are much more sus- 
ceptible to pressure groups from the very districts that stand to 
lose if any activity is to be eliminated. The end result could 
only be the situation that Mr, Vinson foresaw and predicted in his 

The last word in this case has been reserved for Mr, Sike^ 

who as the sponsor of H, R. 5ll5, has undoubtedly been a sponsor 

and proponent of section 638; and from his position as a member 

of the Appropriations Committee and the chairman of the Department 

of the Army Appropriations Sub-committee was in a position to lead 

it past the many obstacles throsm in its way to its finally achlevf 

ed place as a part of Public Law 157. ^^» Sikes spoke before 

the House on the same day as the President's message was received 

but later on in the proceedings for the day, 

Mr. SIKES. Mr. Speaker, a little while ago I listen- 
ed to an amazing message from the President on the bill 
H. R, 6042, the Defense Department Appropriation Act for 
the fiscal year 1956. In that message the Chief Execu- 
tive challenged the constitutionality of a section of the 
bill, but in the same breath placed himself and the exec- 
utive department above the constitution. I was complete- 
ly astounded, I was shocked. Seldom have I heard such 
complete and utter disregard for the rights and privileges 

■^Congressional Record — House July 13, 1955 p. 8997 



o '■'■ -1 ••• '■-.ia4'". T- 

of Congress op of the constitutional processes of law. 

To me, it is unbelievable that the Chief Executive 
of this great Nation would in this way seek to place him- 
self above the law and to set aside a section of law that 
he or someone who speaks for him does not like. This is 
veto by paragraph, and veto by paragraph is not legal. 
This is usurpation of the powers of the Congress, 

Ifey I point out, Mr. Speaker, that limita- 
tions on appropriations acts are not new. There have 
been similar provisions in many acts of Congress. Some 
are in effect now and they present no serious difficulties 
in operation. The disposal of real estate and various 
other matters are reported to the Congress periodically 
by the departments administering such lav/s. They are 
safeguards whose use has been found wise. Secti'm 638 
was modeled on these provisions....... 

I would remind Mr. Eisenhower that this is not a 
military government. This is not a government under 
martial law. We live under a civil government, and all 
Americans under our Constitution are bound by the same 

This is as good a place as any to ring do?/n the curtain 
on this study of just one small facet of the congressional segment 
of the budgetary process in the United States, Each side is now 
down to invective and badinage accomplishing nothing. One thing 
is, however, certain? section 638 is the law of the land. For 
one year, until June 30, 1956, anyway. 

^Congressional Record — HOUSE July 13, 1955 ?• 9005 



A moment of thoughtful reflection upon the narrative just 
unfolded offers some interesting, if not startling, deductions. 
Under the budgetary process in the United States, is it really 
a fact that the will of the chaiirman of a congressional sub-com- 
mittee can over-ride the executive branch, the business interests, 
the avowed and often stated traditional congressional policy of 
government withdrawal from competition with private interests, and 
even the outspoken opposition of influenoial members of his own 
party ? Why could section 638 muster a majority of votes each 
time it was put to the test ? In spite of all the influencial 
and weighty opposition, each hurdle, each obstacle was surmounted 
in turn. Was this because Congress was zealously guarding its 
prerogatives and powers to create and destroy governmental activ- 
ities through budgetary action ? Was it because the Congress 
traditionally pays lip service to high sounding and lofty ideals 
such as »govern]2ient withdrawal from comjjetition' but votes individ. 
ually, each according to his local self interest vice statesman- 
like national interest 7 Was it because the sponsor of the 
section could project his fears for the national security under 


■ W L» 


the Defense Department's stated policy of v/ithdpawal from indust- 
rial and cormnercial-type activities into support for section 638 ? 
Op was it mutual logrolling to prevent home district activities 
from being disestablished by a 'businessman's' executive branch of 
government? In any case, the fact is there ™ section 638 was 
enacted into law against all opposition -— and the exact reason 
it was £ble to defeat all opposition remains as subtle and illus- 
as ever. The incongruousness and illogicalness of the result is 
just accepted with the laiowledge that it could only happen under 
the budgetary process as practiced in the United States, 



U. S. Government, Department of Defense 

Department of Defense Instruction 4100.16 of 8 March 1954 
Department of Defense Instruction 4100,17 of 28 June 1954 
Department of Defense Instruction 4100.18 of 13 October 1954 

U. S. Congress, 84th Congress 1st Session H« R. 5ll5, A BILL to 
prohibit the disposal, by contract or Executive order, of 
work traditionally performed by civilian components of the 
Department of Defense. 3y Mr. Sikes iifcirch 21 j, 1955 
Washington: Government Printing Office 1955 

U. S. Congress, 84th Congress 1st Session H, R, 6042, A BILL mak- 
ing appropriations for the Department of Defense for the 
fiscal year ending Jims 30, 1956, and for other purposes. 

By Mr. ilihon miy 5, 1955 


Gpo 1955 

TJ. S. Congress, Department of Defense Appropriations for 1956, 

Hearings before the Sub-committee of the Coinmittee on Appro- 
priations, House of Representatives, 84th Congress 1st Sess«, 
oa H. R. 5012. v;r.sIi:5,ngton: GPO 1955 

U. S, Congress, Departj^ient of Defense Appropriations for 1956, 

Hearings before the Sub-coroinittee of the Committee on Appp 
priations, U:ij.ted States Senate, 84th Congress 1st Session 
on H. R. 6042. Waslijjigton: GPO 1955 

U. S, Congress, 84th Congress 1st Session, House of Representatives 
Report No. 493 Department of Defense Appropriation Bill, 
1956. Committee on Appropriations Report to accompany 
H. R. 6042, Wa3h5.ngtaii GPO 1955 

U. S. Congress, 84th Congress 1st Session, United States Senate 
Report No. 545 Department of Defense Appropriation Bill, 
1956. Committee on Appropriations Report to accompany 
H. R. 6042, GPO 1955 

U. S. Congresa, 84th Congress 1st Session, Hovise of Representatives 
Report No. IO30 Department of Defense Appropriation Bill. 
1956. Cntiamittee of Conference Report to accompany H. R. 604< 
Washington: Government Printing Office 1955 

U. S. Congrof^s, 84th Congress 1st Session, Public Law 157 Chapter 
358 H. H. 6042 Department of Defense Appropriation Act 
1956. Washington: Government Printing Office 1955 

U. S. Congress, 84th Congress 1st Session, House of Representatives 
Document No. 2l8. Message frc«n the President of the United 
State* apTJToving H. R. 6042. Washington: GPO 1955 

U. S 

Congress, 84th Congress 1st Session, Congressional Record 
Volume 101 Number 77 Wednesday, lifey 11, 1955 
Volume 101 Number 7o Thursday, May 12, 1955 
Volume 101 Number 103 Monday. June 20, 1955 
Volume 101 Number II8 Wednesday, July 5> 1955